November 03, 2023

ICYMI: At Hearing, Senator Warren Highlights Unique Burden of Medical Debt on Servicemembers, Applauds CFPB Action to Remove Medical Debt from Credit Reports

Video of Exchange (YouTube)

Washington, D.C. — At a hearing of the Senate Banking, Housing, and Urban Affairs (BHUA) Committee, U.S. Senator Elizabeth Warren (D-Mass.) discussed the impact of medical debt on servicemembers, highlighting complaints submitted by servicemembers to the Consumer Financial Protection Bureau (CFPB) about collection attempts for bills they did not owe. Senator Warren applauded the CFPB’s recently announced rulemaking process to remove medical debt from credit reports as beneficial to servicemembers and their families.

During the hearing, Senator Warren also highlighted her request that DoD implement CFPB’s recommendations and collect data on medical debt owed by servicemembers and their families to better understand TRICARE’s procedures and effectiveness.

Transcript: Ensuring Financial Protection for Servicemembers, Veterans, and Their Families
U.S. Senate Committee on Banking, Housing, and Urban Affairs
Thursday, November 2, 2023

Senator Elizabeth Warren: Thank you, Mr. Chairman. 

Over 100 million Americans – nearly one in every three adults –  struggle with unpaid medical bills. These bills are often confusing. They’re often filled with errors. Sorting out what is owed means bouncing between insurance companies and healthcare providers, and navigating endless disputes where everybody points somewhere else. 

This process can also wreck peoples’ credit scores. It can ruin the ability of someone to be able to buy a home or rent an apartment, purchase a car, or start a small business. 

We know that servicemembers are also suffering from medical debt. Last year, the CFPB said it received over 5,000 complaints about medical bills from servicemembers and their families over a three-year period. More than half of those complaints were about collection attempts for bills that the servicemembers didn’t actually owe!

Ms. Hruska, most servicemembers and their families have high-quality insurance coverage through TRICARE, meaning they shouldn’t even be billed for most healthcare services. Where is this debt coming from?

Ms. Kelly Hruska, Government Relations Director, National Military Family Association: Well, Senator, it’s a great question. Emergency medical situations, specialized health care are all possible causes of medical debt for military families. Another challenge is TRICARE is slow to pay. In many cases, the charges are referred to debt collection before TRICARE pays, and then once referred to debt collection, the families are dealing with the debt collector and not with the physician.

Senator Warren: So in other words, what you are telling me is that the servicemembers are getting dinged, not for anything they did wrong, but because the information is inaccurate here. Is that right? Is that what you're telling me?

Ms. Hruska: Yes Senator.

Senator Warren: We also know that reports on a credit report of medical debt are not a good indication of whether or not someone is actually creditworthy and actually tries to pay their bills because, in fact, there are so many errors in this.

The CFPB’s complaint database is filled with messages from servicemembers in South Carolina, in Florida, in Alabama, in North Dakota, and in Tennessee who have dealt with surprise unpaid balances or bills that were sent to wrong addresses. But, in order to get our arms around this, we’ve got to have more than just anecdotes, people who identify themselves in the complaint database.

Last year, the CFPB recommended that DoD collect better information on servicemember medical debt. But after I wrote DoD in March to check on their progress, see how they were coming on that, they told me they hadn’t taken any action at all. We need robust information to understand the ways in which TRICARE comes up short. 

But we don’t just need DATA on medical debt. We also need action. 

Ms. Hruska, you discussed the CFPB’s recently proposed rule to remove medical debt from credit reports. Will this help servicemembers and their families as well?

Ms. Hruska: Definitely, Senator. It’s important and it will also help the CFPB and the Department of Defense collect more data.

Senator Warren: Good. This is what the CFPB does best— it identifies a problem that affects thousands—sometimes millions—of people and then it takes direct action.  In this case, I’m very glad to see the agency step up so there’s someone on the side of our servicemembers when they get tangled up with medical billing errors or bad credit reports or endless fights with insurance companies. And I particularly appreciate Vice President Harris’s leadership on this issue. 

This step by the Biden Administration will help servicemembers, veterans, and their families, as well as millions of Americans all across the country. Thank you and thank you again for being with us today.